Friday, 25 August 2017

What’s next? – USDJPY 25.08.17

The dollar/yen was up 0.10 percent as of 07:50 GMT on Friday to trade at 109.66, as the greenback extended gains in anticipation of key speeches at the Jackson Hole symposium.

The US dollar index, which tracks the greenback against a basket of six major rivals, was trading at 93.32 by the time of this writing, adding 0.13 percent.

Federal Reserve Chairwoman Janet Yellen is expected to speak as of 14:00 GMT, while European Central Bank President Mario Draghi is due at 19:00 GMT.

Investors will be monitoring these speeches for hints on future monetary policy adjustments, especially over the reduction of Fed’s massive balance sheet or ECB’s stimulus program.

However, a recent report from Reuters said Draghi is not expected to provide any guidance over monetary policy issues as the regulator awaits for key elections in Germany next month.

On the data front, Japan said its national consumer price index rose by 0.4 percent in July, in line with market analysts’ expectations. The Tokyo core CPI increased 0.5 percent in August, outperforming a forecasted 0.3 percent build.

Earlier this week, the dollar was under pressure following Trump’s threat for a government shutdown in order to secure funding for its controversial wall at the US-Mexico border. He also said the NAFTA deal could be soon ended due to unsatisfactory conditions for the US.

While the dollar increased its bullish positioning yesterday across the board, gains were limited by downbeat housing sector data and cautiousness ahead of Yellen’s speech.

Existing home sales fell 1.3 percent in July, against expectations for a 0.9 percent build. In a separate report, the Labor Department said initial jobless claims moved to 234,000.